A project to spy on two Muslim areas in Birmingham using more than 200 CCTV cameras has been dramatically halted after an investigation by the Guardian revealed it was a counterterrorism initiative.

Bags are being placed over the cameras, recently installed in the neighbourhoods of Washwood Heath and Sparkbrook, to reassure the community their movements are not being monitored while a "full and in-depth consultation" takes place.

In a joint statement last night, West Midlands police and Birmingham city council announced the cameras would not be turned on. They apologised for not being "more explicit" about the funding arrangements of the project, which stipulated they should be used to combat terrorism, a mistake they conceded may have "undermined public confidence".

But officials insisted the £3m project would go ahead following a retrospective public consultation, arguing the cameras would help reduce crime.

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